Abburi Company's manufacturing overhead is 35% of its total conversion costs. If direct labor is $117,000...
Abburi Company's manufacturing overhead is 35% of its total conversion costs. If direct labor is $117,000 and if direct materials are $25,600, the manufacturing overhead is:
Garrison 16e Rechecks 2017-08-01
Multiple Choice
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$217,286
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$63,000
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$76,785
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$13,785
Homework Answers
B. $63,000
Manufacturing overhead = 0.35 × Conversion cost
Direct labor = $117,000
Conversion cost = Direct labor + Manufacturing overhead
Conversion cost = $117,000 + Manufacturing overhead
Conversion cost = $117,000 + (0.35 × Conversion cost)
0.65 × Conversion cost = $117,000
Conversion cost = $117,000 ÷ 0.65 = $180,000
Manufacturing overhead = 0.35 × Conversion cost
Manufacturing overhead = 0.35 × $180,000 = $63,000
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